Western Areas strike exploration deal with Iluka
PERTH (miningweekly.com) – Nickel miner Western Areas has signed a farm-in and joint venture (JV) agreement with fellow-listed Iluka, in South Australia.
Under the terms of the agreement, Western Areas could earn an initial 51% over the metal rights in five exploration licences by spending A$2.75-million within a three year period, with a minimum spend of A$0.75-million required in the first year, and an additional A$1-million in each of the second and third years.
On the completion of the Stage 1 earn-in, a JV will be established between the two companies.
In Stage 2, Western Areas could earn a further 24% interest in the JV’s interest in the metal rights by spending a further A$3-million over a four-year period, starting from the date on which the Stage 1 earning ended.
Western Areas MD Dan Lougher said on Tuesday that the company had been conducting due diligence on a number of farm-in and JV opportunities as part of its regional exploration strategy, adding that the company was pleased to extend its existing presence in the Western Gawler region.
“We believe it offers the significant additional discovery potential that we are looking for,” he told shareholders.
“Regional exploration sits alongside our Forrestania and Cosmos exploration programmes. We have been clear that, with our positive cash flow generation, we would look to access opportunities where the initial investment is relatively low, but the potential rewards are high.
“Our exploration team is ready to begin a work programme aimed at identifying high priority drill targets, building on the significant geophysical programmes and target generation work that Iluka has completed over the last four years,” Lougher said.
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